There is a lot of confusion about trade tariffs in the UK because of Brexit. Proponents of “the EU needs us more than we need them” argument point to the fact that the UK has a trade deficit with the EU and that were the UK to levy tariffs on EU imports (as required under WTO rules) that the exchequer would net a tidy sum. Of course, the EU would need to levy similar tariffs on UK exports, but they claim that the balance is in the UK favour (this ignores UK services exported to the EU, of course).
The incoming US Treasury Secretary, Steve Mnuchin, indicated a willingness to abandon free trade and resort to “protective” taxes on imports to the US: “We're looking at it seriously, there are certain aspects of it that we're concerned about, there are certain aspects that we like”. If followed, this would reverse decades of work towards trade liberalisation (ultimately, a corner-stone of globalisation) which aims to boost trade (and jobs) by reducing barriers to trade between nations. Whilst Mrs May is gung ho for Brexit, she has “been very clear” that the UK will be seeking free trade deals around the world, thereby accepting the thesis that barriers to trade reduce trade itself and employment – a point Brexiters would do well to understand.
Mnuchin also promised “very significant” tax reforms would be unveiled before the Congress breaks in August, aimed at boosting US growth. He suggested that a combination of “deregulation” and tax cuts could boost GDP by 3% as early as the end of next year.
"We are committed to pass tax reform, it will be very significant, it's going to be focused on middle income tax cuts, simplification and making the business tax competitive with the rest of the world". The pledge of 3% growth is more conservative than the 4% growth rate promised by his boss when running for elecion.
Stock markets have moved to record highs since Trump’s election and investors have welcomed Mnuchin’s comments, expecting that the policy will boost corporate profits (which has little direct effect on middle income families, of course, but ought to resonate with billionaires in the Trump administration, however).